AKSA AKRILIK KIMYA SANAYI

AUGUST 2013

AKKOK INDUSTRIAL INVESTMENT & DEVELOPMENT INC.

Akkok Group Companies
CHEMICALS

AKSA, AK-KM, DOWAKSA

ENERGY

AKENERJ, SEDA,EGEMER
TEXTILES

AK-TOPS, AKSA EGYPT

AKKOK
2007 2008
(Million US$)

Net Sales
Export

2009

1.337 1.514
346

2010

2011

2012

2.166

2.675

2.900

3.142

332

417

458

393

326

REAL ESTATE DEVELOPMENT

AKMERKEZ, AK TURZM, AK, SAF GYO

AKKOK

OTHERS

39,6%

OTHER SERVICES

AK-PA, DNKAL, AKPORT, AKTEK,

41,7%

AKMERKEZ LOKANTACILIK (Paper Moon)

18,7%

EMNIYET TICARET
2

Main Strategies

Operational excellence
Increasing Productivity
Cost Reduction
Reliable Quality and Service
CRM
Sustainable Profitability

Producing high quality and reliable energy

with cost effectiveness

Development capabilities in terms of

operational excellence
Identifiying of new business areas
3

STRATEGIC BUSINESS UNITS of AKSA

STANDARD ACRYLIC FIBER BUSINESS UNIT
Largest acrylic fiber producer under one single roof in the world;
14 % global market share;
Turkeys sole local producer with around 70% local market share.

TECHNICAL FIBERS BUSINESS UNIT

High value-added products / Develop fibers for technical end-use areas;
50% global market share in outdoor fibers

ENERGY BUSINESS UNIT

100 Mwe capacity dual gas power generation plant;
42,5 Mwe natural gas

FIBERS

WHAT IS ACRYLIC FIBER?

Acrylic fibre is a synthetic fibre that highly resembles wool,

Wool (natural fiber)

Acrylic Fiber (synthetic fiber)

Used in blends with natural and other synthetic fibers or by themselves,

Easily washed and keep dimensional stability/resistant against sunlight & chemical substances,

Dyed in brilliant colours,

Natural and warm appearance and touch.

ACRYLIC FIBER SECTOR IN BRIEF

Acrylic fiber market accounts for 2 million tonnes in 2012. The global demand for acrylic fiber in 2020 is expected
to be around the same level as 2 million tonnes.
Biggest Consumption Market is China . During 2007-2010 shrank by 20% / adopts self sufficiency strategy/invests
on new capacity no more.
Yearly average consumptions:
Syria
20.000 tpa
1%
Egypt
25.000 tpa
1%
India
100.000 tpa
5%
Iran
120.000 tpa
6%

2012
OTHER

Turkey
250.000 tpa
13%

China
850.000 tpa
43%

Asia+Pacific
Europe
Middle East
Turkey
USA
Africa
South
America
Toplam

Consumption
('000 tonnes)

1.140
165
175
275
185
50
-

57
8
9
14
9
3
-

1.990

100

Sector has average 90% of capacity utilisation rate. Europe accounts for excess capacity.

. East balanced capacity and demand,

Far
Shut downs (Europe, USA, Far East) and consolidations have taken place for last 10 years.
7

HAVING 42 YEARS OF EXPERIENCE IN ACRYLIC FIBER INDUSTRY...

Leader in Turkey and in international markets in terms of capacity, size, pre-and post-service quality, product
diversity & flexibility;
Low cost leader;
Production capacity : 308,000 ton/year;
Capacity Utilization Rate:86% in 2010, 93 % in 2011, 96% in 2012, 98% in Q2 2013

SUCCESS THAT COMES FROM A DIVERSITY OF PRODUCTS...

Major Acrylic Fiber Uses;

Apparel
Home Textiles & Furnishings
Industrial Uses
8

AKSAsDevelopmentOver40Years

AKSA 1971
Initial Capacity 5,000 tpa

AKSA Today
Capacity 308,000 tpa

By the end of 2007, capacity reached 308,000 tpa.

2013 JUNE / SALES BREAKDOWN

EXPORT SALES BREAKDOWN
( 2013 JUNE)

OTHER, 5%
MIDDLE
EAST, 31%

DOMESTIC SALES BREAKDOWN

( 2013 JUNE )

CHINA, 18%

Handknit;
4%

Other; 5%

Knitwear;
60%

USA, 18%
AFRICA, 7%
EUROPE,
21%

Carpets,
31%

10

ACRYLIC FIBER INDUSTRY PLAYERS

AKSA (TURKEY) / Production Capacity: 308,000 tpa
MONTEFIBRE (SPAIN) / 95,000 tpa

DRALON (GERMANY) / 188,000 tpa

FORMOSA (TAIWAN) / 72,000 tpa
THA ACRYLC FBRE (THAILAND)/ 120,000 tpa
SHANGHA PETROCHEMCALS (SPC) (CHINA) / 150,000 tpa
DAQNG PETROCHEMCAL(CHINA) / 65,000 tpa
JILIN (CHINA) / 120,000 tpa

JIMONT (CHINA) / 100,000 tpa

There are 35 acrylic fiber producer in the world. Despite the total capacity of acrylic fiber
producers 2.3 Million tons / year ,total production level is around 2 million tons. The capacity 11
utilization rate in the sector is around 90%.

GLOBAL PRODUCTIONS OF TEXTILE FIBERS

1970 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Synthetic Fibers

8.4

2012

2025

2050

14.5 16.5 19.0 22.5

32.1

31.7 33.9 35.5 38.0 38.2 41.3 44.5 42.6 43.9 48.0

51.8

54.3

63.6

97.2

Polyester 0.0

0.0

0.0

0.0

0.0

19.1

19.2 21.0 22.3 24.4 24.7 27.8 31.1 30.7 32.0 36.0

38.8

41.0

50.0

80.0

PP fibers 0.0

0.0

0.0

0.0

0.0

6.0

5.8

5.9

6.2

6.3

6.5

6.5

6.4

5.9

6.1

6.0

6.2

6.5

7.0

10.0

PolyamidE 0.0

0.0

0.0

0.0

0.0

4.1

3.7

3.9

4.0

4.0

3.9

3.9

3.9

3.5

3.3

4.0

3.9

3.9

4.5

5.0

Acrylics 0.0

0.0

0.0

0.0

0.0

2.7

2.6

2.7

2.7

2.7

2.6

2.5

2.4

1.9

2.0

2.0

2.0

2.0

2.1

2.2

Other 0.0

0.0

0.0

0.0

0.0

0.3

0.3

0.3

0.4

0.5

0.5

0.6

0.6

0.6

0.5

0.0

0.9

0.9

0.0

0.0

17.0 19.8 24.7 22.9 24.3

28.4

27.6 28.9 28.6 30.6 33.2 34.6 35.9 33.4 31.1 33.3

36.2

35.7

41.4

52.8

3.0

2.8

2.7

3.6

3.7

4.5

6.0

10.0

Cotton 11.0 14.0 19.0 17.0 19.0

19.7

19.8 20.6 20.1 22.0 24.4 25.7 26.7 24.5 22.5 24.5

27.2

26.0

30.0

37.0

Natural Fibers

Cellulosics 3.5

3.5

3.2

3.1

2.7

2.9

3.1

3.1

3.3

3.6

3.2

3.0

Wool 1.7

1.7

1.7

2.0

1.5

1.3

1.2

1.4

1.3

1.2

1.2

1.2

1.2

1.2

1.2

1.1

1.1

1.1

1.0

1.2

Hemp 0.0

0.0

0.0

0.0

0.0

4.0

3.1

3.2

3.2

3.2

3.3

3.2

3.2

3.3

3.3

3.2

3.2

3.1

3.0

3.0

Linen 0.7

0.6

0.8

0.7

0.7

0.5

0.6

0.7

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.5

0.6

0.6

0.8

1.0

Ramie 0.0

0.0

0.0

0.0

0.0

0.1

0.2

0.2

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.2

0.2

0.2

0.3

0.3

Silk 0.1 0.1 0.1 0.1 0.1

25.4 34.3 41.2 41.9 46.8

0.1
60.5

0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2
59.3 62.8 64.1 68.6 71.4 75.9 80.4 76.0 75.0 81.3

0.2
88.0

0.2
90.0

Total

0.3
0.3
105.0 150.0

Population (billion)

3,6

5,8

9.5

Kg Fiber / person

7,0

10,3

12.6

12.9

13.1

15.8

Acrylic fibers/textile
fibers (%)

4.4

4.3

4.4

4.2

4.0

3.7

3.3

3.0

2.5

2.7

2.4

2.3

2.2

2.0

1.5

Acrylic fibers/Synthetic
fibers (%)

8.3

8.1

8.1

7.5

7.2

6.9

6.1

5.5

4.5

4.6

4.1

3.9

3.6

3.3

2.3

12

COST STRUCTURE OF ACRLYIC FIBER

The key cost component is the raw material Acrylonitrile
Acrlyonitrile prices fluctuates depending on the oil prices and the demand supply balance;
30% of ACN locally sourced from PETKIM, The rest is heavily imported from Europe / US.

TheotherimportantcostcomponentisTheEnergy

Continously improving energy specific consumption through investments;

Labor Costs

High rate of production per capita;

Low labor rate compared to European competitors.
13

ECRU TOW - ACN PRICE MARGIN (US$/ton)

7000

6000

5000

4000

3000

2000

1000

0
2000

2001

2002

2003

2004

2005
ACN

2006

2007

ECRUTOW

2008

2009

2010

2011

2012

2013/JUL

MARGIN

Source: PCI Average of US/Europe/Far East Prices

14

ENERGY

15

ENERGY GENERATION & TURNOVER

Generation (2012) KWH

Generation (2013 Q2) KWH

24%

29%
Electricity -KWH

Electricity -KWH

Steam- KWH

Steam- KWH

71%

76%

Energy Turnover (2013 Q2)

Energy Turnover (2012)

4%

9%

Group

13%

Group

3%

Non-group

Non-group
87%

Energy Turnover
US$ 43 million

Turkish Electricity
Transmission
Company

84%

Turkish Electricity
Transmission
Company

Energy Turnover
US$ 30 million
16

CARBON FIBER

17

WHAT IS CARBON FIBER?

human hair ,
(50-70 )

Carbon fibers are extremely fine fibers (typ, 5-7 in dia,)

consisting mostly of carbon atoms,

carbon fiber
(5-7 )

Carbon fiber is >95% carbon,

a carbon fiber and a human hair

(source: wikipedia)

The structure of carbon fiber is similar to graphite: sheets

of carbon atoms, arranged in hexagonal patterns, aligned
along the axis of the fiber,

Carbon fibers are produced in tows (yarns) ranging from

1,000 filaments (1k), to 3k, 6k, 12k, 24k, 50k, etc.

graphene sheet
(source: wikipedia)

3k
= 3,000
filaments

18

EXPECTED GROWTH IN DEMAND FOR CARBON FIBER

Industrial Apps
2010 vs 2020:
Wind:
5,000t 15,000-50,000t
Compounding:
5,000t 15,000-50,000t

Pressure Vessels:
3,000t 15,000-50,000t

Carbon fibre demand was around 20,000 tonnes in 2004,

The demand than doubled in the four years to 2008, We expect the
market (currently 40,000 tonnes) to double by 2015 and double
again by 2020.
Industrial Applications are expected to make up the majority of
future demand.
Market for CF
Mt

2010

2015

40

>80,000

2020
~150.000
(100.000-500.000)

Value

US$ 1,0-1,5 B

US$ 2-3 B

US$ 3-15 B

Autos:
2,500t 20,000-100,000t
Infrastructure:
2,000t 5,000-25,000t
Others:
5,000t 15,000-50,000t
Aerospace Apps
2010 vs 2020:
8,000t 25,000-30,000t
Sports Goods
2010 vs 2020:
7,000t 10,000-15,000t
19

THE UN-METNEEDFORCARBONFIBER
Market Research;

Carbon Fiber Capacity

Hexcel
Zoltek

SGL
FPC
Cytec
Others
DowAKSA

Mitsubishi
Rayon

TohoTena

Carbon fiber has been available commercially since

the 1970s,

Demand has grown irregularly depending on new

applications,

Tight supply conditions have occurred every few years

There appears to be an un-met need in the market
forhigh quality, reliably supplied, competitively priced
carbon fiber

Toray

With the worlds largest plant producing acrylic fiber production under one roof,
With 40+ years of know-how, own technology and experience in acrylic fiber and specialty technical fibers,
With the resources and ability to develop PAN precursor and carbonization technology in house,
With the resources to facilitize to produce PAN precursor and carbon fiber,
AKSA decided to develop PAN precursor and enter the carbon fiber business.

20

LONG-TERM GOALS
Generate at least US$1 billion sustainable revenues,
Sustain EBITDA Margins around 12-13%,
Maintain capacity utilization and low-cost leadership through cost saving projects
and economies of scale,
Develop new technical fibers to create added value and end-use areas except textile
industry.

21

DEVELOPMENTS DURING 2012-2013

Aksa Karbon Elyaf San. A.. is established by partial spin off as of 2
January .
Establishment of 50%-%50% joint venture company for carbon fiber
operations is finalised with Dow Europe (50% of equity value is 185 mio
USD) as of 29 June.
First phase of new co-generation power plant is successfully activated as
of March 2012. Second phase is activated in June 2013.
Dividend payments amounting to USD 25 million have been completed in
May 2012, in 2013 the amount has been increased to USD 50 million and
paid in March.
40% minority shares of Ak-Tops has been acquired by Aksa in 2013.
10,5 million USD has been paid for 40% of Ak-Tops and 100% of the
company is owned by Aksa as of August 2013.

22

BUDGET FIGURES

(million US$)

2012 Actual

2013 June Actual 2013 Budget

US$900

US$442

US$850-900

AF

US$800

US$377

US$725-765

Tecnical Fibers

US$60

US$35

US$60-65

Energy

US$40

US$30

US$65-70

Exports

US$320

US$146

US$260-280

AF CUR

95%

98%

95%

EBITDA margin ~

12%

14%

12%

CAPEX

US$45

US$30

US$70

Net Sales

23

NET SALES & EXPORT (FOB)

(USD mio)
978

1000

907
900

851

800
672

700
600

678

670

557

532

519
500

442
380

389

400

333

317

268

259

300
180
200

250

207

323

312
232

146

138
67

100

92

0
2000

2002

2003

2004

2005

2006

2007

Net sales

2008

2009

2010

2011

2012

2013 Q2

Export

24

EBITDA - NET PROFIT

(USD mio)
120
109

108

100

93

93
85

80

74
63

60

60

57

49

48

45

43

37

40
26

19
20

35

10

0
2005

2006

2007

2008
EBITDA

2009

2010

2011

2012

2013 Q2

NET PROFIT

25

EBITDA - NET PROFIT

(%)
16%
14%

13.2%

13.8%

14.2%

12%

12.0%
10.0%

11.0%

10%
9.0%
8%

10.2%

8.9%
7.3%

8.0%

6.6%
6.4%

6%

5.8%

4%

2.8%

4.7%
4.4%

2%

1.9%

0%
2005

2006

2007

2008
EBITDA

2009

2010

2011

2012

2013 Q2

NET PROFIT

26

INVESTMENT-PROFIT-DIVIDEND
2002-2013 Q2:
Total Investment
Total Net Profit
Total Dividend

:
:
:

US$ 718,7 mio USD

US$ 479,6 mio USD
US$ 137,6 mio USD
159.00

160
140
120
100

87.8

80
60

97.9

67.4
57.00

57.2

52.3

48.5

20

23.8
8.6

13.3 10.817.9

26.4

27.4

30.4

28.4

13.5

10

29.56

25.00

19.5

10.2
9.7

50.00
45.02

37.00

38.7

40

92.61

95.85

35.19

10
0.00

0
2002

2003

2004

2005

2006

2007

INVESTMENT

2008

NET PROFIT

2009

2010

2011

2012

2013 Q2

DIVIDEND

27

SUMMARY INCOME STATEMENT

Income Statement
('million USD)

2008

2009

2010

2011

2012

2013 Q2

NET SALES

678

556

851

978

907

442

EBITDA

60

74

85

108

109

63

NET PROFIT

45

26

37

57

93

35

28

BALANCE SHEET
Balance Sheet
('000 US$)
ASSETS
Current Assets
Liquid Assets
Receivables
Inventories
Other
Long Term Assets
Long Term Trade Receivables
Financial Assets
Joint Venture Investments
Tangible Assets
Intangible Assets
Other Long Term Assets
LIABILITIES
Current Liabilities
Financial Liabilities
Trade Payables
Tax Liabilities
Other Short Term Liabilities
Long Term Liabilities
Financial Liabilities
Trade Payables
Derivative Financial Instruments
Provisions for Debt and Expenses
Deferred Tax Liabilities
Other Long Term Liabilities
Shareholders' Equity

2008
707,481
376,237
26,685
264,282
63,738
21,532
331,244
8,375
17,945
281,527
128
23,269
707,481
158,370
66,719
75,029
1,362
15,260
100,070
80,070
3,098
4,923
9,044
2,934
449,041

2009
808,967
390,652
64,003
218,251
73,592
34,806
418,316
7,792
18,024
353,984
4,393
34,123
808,967
209,146
87,856
109,854
11,436
121,144
91,253
1,697
2,515
6,306
9,478
9,895
478,677

2010
836,241
388,060
36,832
211,656
88,627
50,945
448,181
6,179
17,554
416,635
3,344
4,469
836,241
227,168
85,478
134,669
7,021
117,949
90,108
3,234
7,218
8,679
8,709
491,124

2011
874,882
406,678
45,056
212,450
101,316
47,857
468,204
569
733
444,129
11,333
11,441
874,882
229,220
91,580
133,815
3,825
195,163
169,540
2,210
7,528
9,096
6,788
450,499

2012
2013 Q2
873,419 856,547
388,342 395,787
79,363
95,664
178,657 180,668
92,525
85,902
37,797
33,552
485,077 460,760
2,519
0
744
689
127,758 121,320
346,704 328,037
2,704
5,284
4,647
5,429
873,419 856,547
240,994 259,660
95,589
92,053
137,141 157,833
3,311
5,500
4,953
4,273
87,759
96,747
72,437
83,968
967
562
9,063
7,915
4,736
4,079
556
223
544,665 500,140
29

THANK YOU

30